Speech by Mr A Nithiah Nandan, during Parliamentary debate on changes to the CPF on 28-29 August, 1-2 September 2003
Mr Speaker, Sir, first, allow me to thank the Prime Minister and his Cabinet colleagues for having a lower CPF cut by just 3%, and not all the way to 6%, and bringing progressive changes to other components in the CPF scheme.
Sir, we have to accept the fact that under the current economic uncertainty and the increase in unemployment, any measure taken by the Government in order to save jobs and maintain our competitiveness and, in this instance, to cut wage costs through the CPF component, is done out of necessity. The workforce is fully aware of the volatile situation in the job market. We understand and fully comprehend how crucial it is to act now and, therefore, I sincerely endorse these recommendations.
Yesterday night we had a discussion and a dialogue with our group of union leaders. We had a very frank discussion for two hours. At the end of the day, everyone realised how bad the situation was on the ground, and they realised that changes needed to be brought immediately, and they supported unanimously the changes. But they also highlighted a number of viewpoints.
I wish to express some of my viewpoints and their concerns too:
(1) It must be accepted that any cut in CPF would cause pain and hardship to workers. Workers are required to make sacrifices to save jobs and to help increase competitiveness. Workers understand these reasons and support the steps taken. But workers' sacrifice should not go to waste or just to increase the employer's profitability. Workers wish to see a drastic drop in the number of workers retrenched. To this end, the Government-linked companies and large MNCs must set an example in not resorting to retrenchment as far as possible.
(2) The Government must go public on the full package of cost cutting measures and introduce additional measures, if necessary, that it needs to put in place in order to maintain our competitive edge and not just highlight on wage cut, CPF cut and retrenchment only. The ground must be given a full picture, only then can they be convinced.
(3) Employers, on the other hand, must not take advantage of the situation. They must acknowledge the sacrifice made by the workers during these hard times by compensating them equitably during good times. Employers who are currently profitable and accumulate additional gains because of the CPF cut, should give back workers part of the additional gains in the form of special bonus or other methods. Profitable MNCs and Government-linked companies should publicly support this call, rather than giving lame excuses. In this context, I support and fully appreciate the Prime Minister's call for such companies to come forward to reward such workers in these industries.
(4) The Government must give a clear signal to MNCs that they are really operating in our island state and to potential investors that it is prepared to look at all possibilities to help the companies maintain their competitiveness and that they have a stake in Singapore.
Mr Speaker, Sir, it is very reassuring to hear that the Government expressly states that no Singaporean will lose his or her home or be denied of medical care because of the cut in CPF contributions, and that the banks have also stated that they will be flexible if it affects the servicing of the housing loans. The Government must introduce long-term help to those with mortgage loans rather than deferring the payments. Any deferment would cost additional expenditure in the form of interest.
Government should consider the reduction of interest rates to mortgage loans of HDB, and I think this is within the capacity of the Government. The Government has always shown a lot of concern for our Singapore citizens.
Sir, I now come back to the announcement made by the Prime Minister earlier on on contributions rates, especially for workers aged 50 to 55. In fact, at the National Day Rally, the Prime Minister had again made a call for employers to employ older workers. But I do not like to use the term "older workers" because sometimes that puts off a lot of employers also. And I also belong to that age group. So I would rather use the term "workers aged 50 to 55 and beyond". The problem here is not just cutting CPF. Because if you can cut CPF and bring results, we will support it. If you want to bring it lower, that is a three-step reduction for such workers. And if it brings the desired results, we will definitely go all the way. It is better to have a job than not to have a job, and a lower CPF does not matter.
But the problem here is because a lot of employers have a cheaper alternative, that is, foreign workers. They give all kinds of excuses in employing them. One of the excuses is that they say the workers are choosy. That is not true for every worker. We should not just across-the-board label all Singaporeans as being choosy. There are many workers who are desperately in need of a job, and I have come across many in my work as a unionist. And it really pains me because there are a number of people requesting and pleading for jobs, and they are even prepared to work for $800 to $900. But many employers just give all kinds of excuses, and they just give them a very political answer, "We will definitely call you back." The answer is actually they are not going to call them back.
So, I think Government needs to do something drastic rather than just make statements. I really support the Prime Minister's call. I know he feels for such workers. But feeling alone is not enough, he must do more than feeling. So we hope that he would do more than that.
Coming to the Minimum Sum and Medisave Minimum Sum, I have a quick look at it. By year 2013, a lot of lower-income workers will not be able to draw any sum when they reach 55 - it looks like that - unless there is a hefty wage increase. For such workers, they depend a lot on age 55 to withdraw for their essential needs, and they actually postpone these essential needs until 55. So maybe the Government should look at how it could help them. I am not suggesting help for those who are going to Batam or squandering their money with another family. I am talking about those who really need the help. So I think they have to take a look, and maybe the Government can give projection figures - in 2013, how much will such workers be able to draw out. That will give them some level of comfort. So just figures alone would not be enough. I hope the Government will come up with more information in these areas.
Sir, Singapore workers have stood by the Government through a number of crises, and that has been our greatest advantage in attracting investments and keeping investments in Singapore. And we will continue to do so. There is no reason that the workers will react differently. We have the ground feel and we know that the workers will rally behind us. But, at the same time, the workers would also like the Government to do whatever it can to ease their pain. It must look at the current costs of essential goods - medical cost, public transport, and the cost of education - and see how best it could be adjusted to defray the day-to-day expenses of the workers in taking care of themselves and their families. To what extent is the Government prepared to absorb such costs? This is what the public expects the Government to seriously think about.
Sir, in conclusion, this is a very painful adjustment and Singaporeans will definitely rally behind the Government and the Government must equally give all the support. The employers must not be providing lip service but really clear-cut support to workers who are employed under their hands.
